UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

[X] Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period endedSeptember 30, 2018

[  ] Transition Report pursuant to 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from __________ to__________

Commission File Number:000-21202

Textmunication Holdings, Inc.

(Exact name of registrant as specified in its charter)

1940 Contra Costa Blvd. Pleasant Hill, CA 94523

(Address of principal executive offices)

925-777-2111

(Registrant’s telephone number)

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

[X] [X] Yes [  ] No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). [X] Yes [  ] No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “non-accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [  ]

State the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 2,015,914,6904,256,452 common shares as of November 17, 201714, 2018

TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

Our consolidated financial statements included in this Form 10-Q are as follows:

These consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and the SEC instructions to Form 10-Q. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. Operating results for the interim period ended September 30, 2017 are not necessarily indicative of the results that can be expected for the full year.

TEXTMUNICATION HOLDINGS, INC.

CONSOLIDATED BALANCE SHEETSHEETS

(UNAUDITED)

SeeThe accompanying notes toare an integral part of these unaudited consolidated financial statements.statements

TEXTMUNICATION HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

SeeThe accompanying notes toare an integral part of these unaudited consolidated financial statements.statements

TEXTMUNICATION, HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

SeeThe accompanying notes toare an integral part of these unaudited consolidated financial statements.

statements

TEXTMUNICATION HOLDINGS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE QUARTERTHREE AND NINE MONTHS ENDED SEPTEMBER 30, 2017

(UNAUDITED)2018

NOTE 1 – BASIS OF PRESENTATIONORGANIZATION AND GOING CONCERN

The CompanyBUSINESS OPERATIONS

Textmunication Holdings, Inc. (the “Company”)(Company) was incorporated on May 13, 2010 under the laws of the State of California. The Company isTextmunication Holdings, Inc.is an online mobile marketing platform service that will connect merchants with their customers and allow them to drive loyalty and repeat business in a non-intrusive, value added medium. For merchants we provide a mobile marketing platform where they can always send the most up-to-date offers/discounts/alerts/events schedule, such as happy hours, trivia night, and other campaigns. The consumer can also access specials and promotions that merchants choose to distribute through Textmunication Holdings, Inc.by opting in to keywords designated to the merchant’s keywords.

On November 16, 2013, the Company entered into a Share Exchange Agreement (SEA) with Textmunication Holdings (Holdings). a Nevada corporation, whereby the sole shareholder of the Company received 65,640 (post-split) new shares of common stock of Holdings in exchange for 100% of the Company’s issued and outstanding shares.

The 1 – 1,000 Reverse Split of “Textmunication Holdings, Inc.” (TXHD) was announced 7/6/2018. This corporate action from FINRA took effect at the open of business 7/9/2018.

Textmunication Holdings, Inc. (“TXHD”) entered into Advisory Agreements with Mr. Thomas DiBenedetto and Mr. Joseph Griffin on July 9th, 2018. Mr. DiBenedetto will advise Textmunication on business execution, growth initiatives and strategic investment opportunities. Mr. Joseph Griffin will join Textmunication as a financial investment advisor. In his role, he will advise the company on strategic investment opportunities and investment execution.

Basis of Presentation

The accompanying unaudited interim financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission, and should be read in conjunction with the audited financial statements and notes thereto contained in the Company’s most recent Annual Financial Statements filed with the SEC on Form 10-K. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim period presented have been reflected herein. The results of operations for the interim period are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements which would substantially duplicate the disclosures contained in the audited financial statements for the most recent fiscal period, as reported in the Form 10-K, have been omitted.

Going concern

These consolidated financial statements have been prepared in accordance with generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. As of September 30, 2017,2018, the Company has an accumulated deficit of $14,823,257.$15,165,823. The Company’scompany’s ability to continue as a going concern is contingent upon the successful completion of additional financing arrangements and its ability to achieve and maintain profitable operations. While the Company is expanding its best efforts to achieve the above plans, there is no assurance that any such activity will generate funds that will be available for operations. These conditions raise substantial doubt about the Company’s ability to continue as a going concern.concern for a period of one year from the issuance of these financial statements. These consolidated financial statements do not include any adjustments that might arise from this uncertainty.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Cash

The Company considers all highly liquid instruments purchased with a maturity of three months or less to be cash equivalents.

The Company minimizes its credit risk associated with cash by periodically evaluating the credit quality of its primary financial institution. The balance at times may exceed federally insured limits. At September 30, 2017,2018, no cash balances exceeded the federally insured limit.

Accounts receivable and allowance for doubtful accounts

Accounts receivable are stated at the amount management expects to collect. The Company generally does not require collateral to support customer receivables. The Company provides an allowance for doubtful accounts based upon a review of the outstanding accounts receivable, historical collection information and existing economic conditions. As of September 30, 2017 and 2016 the reporting date no allowance for doubtful accounts was $0 and $0, respectively.bad debts necessary.

TEXTMUNICATION HOLDINGS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE QUARTERTHREE AND NINE MONTHS ENDED SEPTEMBER 30, 20172018

(UNAUDITED)

Convertible Debt

The Company accounts for the fair value of the conversion features of its convertible debt in accordance with ASC Topic No. 815-15 “Derivatives and Hedging; Embedded Derivatives” (“Topic No. 815-15”). Topic No. 815-15 requires the Company to bifurcate and separately account for the conversion features as an embedded derivative contained in the Company’s convertible debt. The Companycarries the embedded derivative on its balance sheet at fair value and account for’ any unrealized change in fair value as a component of results of operations. The Company values the embedded derivatives using the Black-Scholes pricing model.

Software Costs

We capitalize certain computer software and software development costs incurred in connection with developing or obtaining computer software for internal use when both the preliminary project stage is completed and it is probable that the software will be used as intended. Capitalized software costs include only (i) external direct costs of materials and services utilized in developing or obtaining computer software, (ii) compensation and related benefits for employees who are directly associated with the software project and (iii) interest costs incurred while developing internal-use computer software. Capitalized software costs are included in property, plant and equipment on our balance sheet.

Revenue Recognition

We recognize revenueRevenues are recognized when allcontrol of the following conditions are satisfied: (1) therepromised is persuasive evidence oftransferred to our customers, in an arrangement; (2)amount that reflects the service has been provided to the customer; (3) the amount of feesconsideration we expect to be paid by the customer is fixed or determinable; and (4) the collection of our fees is reasonably assured.entitled to in exchange for those services.

Thus, we recognizeThe Company currently derives a substantial majority of its revenue from fees associated with our subscription revenue on a monthly basis, as services, are provided.which generally include mobile marketing platform services. Customers are billed for the subscription on a monthly quarterly, semi-annual or annualbasis. For all of the Company’s customers, regardless of the method, the Company uses to bill them, subscription revenue is recorded as deferred revenue in the accompanying consolidated balance sheets. As services are performed, the Company recognizes subscription revenue on a monthly basis over the applicable service period. When the Company provides a free trial period, the Company does not begin to recognize subscription revenue until the trial period has ended and the customer has been billed for the services.

Professional services revenues are generated from SMS and RCS packages where client logs into a cloud-based application to send targeted SMS messages to their subscribers base​. Our custom web application SMS/RCS platform is typically billed on a fixed-price based on the number of SMS/RCS allocated for each package our client purchases. Generally, revenue for SMS/RCS ​services is recognized immediately as our clients have instant access to their web-based application to send out messages​, the number of SMS/RCS messages allocated to a client expires at the customer’s option.end of each month and renews beginning of each month. The Company offers whereby control of the product passes to the customer when delivered and revenue is recognized at the time of delivery.

Results for reporting periods beginning after January 1, 2018 are presented under Topic 606, while prior period amounts are not adjusted and continue to be reported in accordance with our historic accounting under Topic 605

We did not have a cumulative impact as of January 1, 2018 due to the adoption of Topic 606 and there was not an impact to our consolidated statement of operations for the nine months ended September 30, 2018 as a result of applying Topic 606.

Software Development Costs

The Company applies the principles of FASB ASC 985-20, Accounting for the Costs of Computer Software to Be Sold, Leased, or Otherwise Marketed (“ASC 985-20”). ASC 985-20 requires that software development costs incurred in conjunction with product development be charged to research and development expense until technological feasibility is established. Thereafter, until the product is released for sale, software development costs must be capitalized and reported at the lower of unamortized cost or net realizable value of the related product.

The Company also applies the principles of FASB ASC 350-40, Accounting for the Cost of Computer Software Developed or Obtained for Internal Use (“ASC 350-40”). ASC 350-40 requires that software development costs incurred before the preliminary project stage be expensed as incurred. We capitalize development costs related to these software applications once the preliminary project stage is complete and it is probable that the project will be completed, and the software will be used to perform the function intended.

As of September 30, 2018, after series of testing and evaluation, management had concluded that the software is inadequate and cannot be fully utilize with the ever-increasing transactions of the company and customer demands. As a result, the balances as of September 30, 2018 and December 31, 2017, the capitalized software development costs in the amount of $85,092 and $45,229 respectively was determined to be fully impaired.

Fair Value of Financial Instruments

The carrying amounts reflected in the balance sheets for cash, accounts payable and accrued expenses approximate the respective fair values due to the short maturities of these items.

TEXTMUNICATION HOLDINGS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2018

As required by the Fair Value Measurements and Disclosures Topic of the FASB ASC, fair value is measured based on a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: (Level 1) observable inputs such as quoted prices in active markets; (Level 2) inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and (Level 3) unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

The three levels of the fair value hierarchy are described below:

Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

Level 2: Quoted prices in markets that are not active, or inputs that is observable, either directly or indirectly, for substantially the full term of the asset or liability;

Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity).

The fair value of the accounts receivable, accounts payable, notes payable are considered short term in nature and therefore their value is considered fair value.

TEXTMUNICATION HOLDINGS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE QUARTER ENDED SEPTEMBER 30, 2017

(UNAUDITED)

Financial assets and liabilities measured at fair value on a recurring basis are summarized below as offor the three months ended September 30, 2017:2018:

Financial assets and liabilities measured at fair value on a recurring basis are summarized below as offor the year ended December 31, 2016:2017:

Net Income (Loss)income (loss) per Common Share

Basic net income (loss) per share is computed by dividing the net loss attributable to the common stockholders by the weighted average number of shares of common stock outstanding during the period. Fully diluted loss per share is computed similar to basic loss per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.

TEXTMUNICATION HOLDINGS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2018

Stock-Based Compensation

The Company accounts for employee stock-based compensation in accordance with the guidance of FASB ASC Topic 718, Compensation – Stock Compensation which requires all share-based payments to employees, including grants of employee stock options, to be recognized in the financial statements based on their fair values. The fair value of the equity instrument is charged directly to compensation expense and credited to additional paid-in capital over the period during which services are rendered.

StockThe Company follows ASC Topic 505-50, formerly EITF 96-18, “Accounting for Equity Instruments that are Issued to Other than Employees for Acquiring, or in Conjunction with Selling Goods and Services,” for stock options and warrants issued to consultants and other non-employees. In accordance with ASC Topic 505-50, these stock options and warrants issued as compensation to consultants and other non-employees for services provided to the Company are accounted for based upon the fair value of the services provided or the estimated fair market value of the option or warrant, whichever can be more clearly determined. The fair value of the equity instrument is charged directly to compensation expense and additional paid-in capital over the period during which services are rendered.

Investments in Securities

Investments in securities are accounted for using the equity method if the investment provides the Company the ability to exercise significant influence, but not control, over an investee. Significant influence is generally deemed to exist if the Company has an ownership interest in the voting stock of the investee between 20% and 50%, although other factors, such as representation on the investee’s Board of Directors, are considered in determining whether the equity method is appropriate.

TEXTMUNICATION HOLDINGS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE QUARTER ENDED SEPTEMBER 30, 2017

(UNAUDITED)

Recent Accounting Pronouncements

In May 2014,November 2016, the Financial Accounting Standards Board (“FASB”)FASB issued Accounting Standards Update (“ASU”) 2014-09, “Revenue from Contracts with CustomersASU 2016-18, “Statement of Cash Flows (Topic 606).230)” The new guidance provides new criteria for recognizing revenue to depict, requiring that the transferstatement of goods or services to customers in amounts that reflectcash flows explain the consideration to which the company expects to be entitled in exchange for those goods or services. The new guidance requires expanded disclosures to provide greater insight into both revenue that has been recognized and revenue that is expected to be recognizedchange in the future from existing contracts. Quantitativetotal cash, cash equivalents, and qualitative information will be provided about the significant judgments and changes in those judgments that management made to determine the revenue thatamounts generally described as restricted cash or restricted cash equivalents. This guidance is recorded. This accounting standard update, as amended, will be effective for annualfiscal years, and interim reporting periods therein, beginning after December 15, 2017 including interim reporting periods withinwith early adoption permitted. Management evaluated ASU 2016-18 and determined that reporting periods. The new revenue standard may be applied retrospectively to each prior period presented or retrospectively with the cumulative effect recognized as of the date of adoption. Early adoption is permitted, but no earlier than fiscal 2017. The Company is currently assessing the provisions of the guidance and has not determined the impact of the adoption of this guidancenew accounting standard did not have a material impact on itsthe Company’s consolidated financial statements.

NOTE 3 – RELATED PARTY TRANSACTIONS

As of September 30, 2017,2018, the Company had advances due to a related party. The loans are due on demand and have no interest. Amounts outstanding as of September 30, 20172018 and December 31, 20162017 were approximately $11,750 and $11,750, respectively

NOTE 4 – LOANS PAYABLE

As of September 30, 2017 and December 31, 2016, the Company has short term loans payable of $11,500 and $3,712, respectively. During the nine months ended September 30, 2017 and 2016, the Company received proceeds of $11,500 and $0 and made payments of $9,463 and $100,483, respectively, from certain short-term loans payable with interest rates ranging from 23%-28%.

NOTE 54 - CONVERTIBLE NOTE PAYABLE 

Convertible notes payable consistconsists of the following:

On February 28, 2017, we entered into a convertible promissory note pursuant to which we borrowed $14,489. Interest under the convertible promissory note is 10% per annum, and the principal and all accrued but unpaid interest is due on August 27, 2017. The note is convertible at any date after the issuance date at noteholders option into shares of our common stock at a variable conversion price of 50% of the two lowest day market price of our common stock during the previous 20 days immediately preceding the conversion date . Asfollowing as of September 30, 2017, the maturity was extended to2018 and December 31, 2017.2017:

On May 15, 2017, we entered into a convertible promissory note pursuant to which we borrowed $115,000. Interest under

The Company accounts for the convertible promissory note is 10% per annum, and the principal and all accrued but unpaid interest is due on May 15, 2018. The note is convertible at any date after the issuance date at noteholders option into shares of our common stock at a variable conversion price of 64%fair value of the lowest VWAPconversion features of our common stock duringits convertible debt in accordance with ASC Topic No. 815-15 “Derivatives and Hedging; Embedded Derivatives” (“Topic No. 815-15”). Topic No. 815-15 requires the previous 18 days immediately precedingCompany to bifurcate and separately account for the conversion date.features as an embedded derivative contained in the Company’s convertible debt. The Company recordedis required to carry the embedded derivative on its balance sheet at fair value and account for’ any unrealized change in fair value as a debt discount incomponent of results of operations. The Company values the amount of $115,000 in connection withembedded derivatives using the initial valuation of the derivative liability of the note to be amortized utilizing the effective interest method of accretion over the term of the note. Further, the Company recognized a derivative liability of $166,621 and an initial loss of $51,621 based on the Black Scholes MertonBlack-Scholes pricing model.

TEXTMUNICATION HOLDINGS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE QUARTERTHREE AND NINE MONTHS ENDED SEPTEMBER 30, 2017

(UNAUDITED)2018

Interest expense (excluding amortizationThe following table presents details of debt discount) related to the Company’s derivative liabilities associated with its convertible notes payable as of September 30, 2018 and December 31, 2017:

During the nine months ended September 30, 2017 and 2016 was $136,737 and $133,595, respectively.

During the three months ended September 30, 2017,2018, the Company issued 399,151,088647,458 shares of common stock with a fair value of $54,631 for the partial conversion of $222,178 in convertible notes payable. The converted portion of the notes also had associated derivative liabilities with fair values on the date of conversion of $1,085,344.866,361. The conversion of the derivative liabilities has been recorded through additional paid-in capital.

The following table presents details of the changes in the Company’s derivative liabilities associated with its convertible notes for the nine months ended September 30, 2017:

The Black-Scholes model utilized the following inputs to value the derivative liability at the date of issuance of the convertible note and at September 30, 2017:2018:

Settlement Agreements

On February 28, 2017,

During the nine months ended September 30, 2018, the Company entered into a certain settlement agreementcancellation agreements with the holder of a certain notenotes payable in the amount of $128,000amounting to $96,721, including accrued interest issued on September 8,from December 10, 2015 for total proceeds of $121,755.through August 27, 2017. The Company paid $21,755 cash and $100,000face value of the note was purchased and assigned to a new noteholder. The difference between the original note and settlement amountcanceled debt of $6,245$96,721 has been recorded as a gain on settlement of notes payable as of September 30, 2017. Additionally, the new note holder agreed2018. The company also have settled convertible notes amounting to forgive $50,000 of the assigned debt. The forgiven debt was recorded$172,230 for a gain on settlement of notes payable.

On June 23, 2017, the Company entered into a certain settlement agreement with the holder of a certain note payable in thetotal amount of $237,750 issued on July 22, 2016 and a carrying amount as of the date of settlement of $249,421 including accrued interest and an associated derivative liability of $247,305 for 550,000,000 shares of common stock with a fair value on the date of settlement of $495,000. The difference between the note and settlement amount of $1,726 has been recorded as a gain on settlement of notes payable.$32,500

During the nine months ended September 30, 2017, certain notes payable issued on February 13, 2014 and October 21, 2014 was forgiven by the noteholder. The carrying value of the notes payable and accrued interest of $32,375 was recorded a gain on settlement of notes payable.

TEXTMUNICATION HOLDINGS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE QUARTER ENDED SEPTEMBER 30, 2017

(UNAUDITED)

During the nine months ended September 30, 2017, a note payable issued on April 17, 2014 was forgiven. The carrying value of the note payable of $5,000 was recorded a gain on settlement of notes payable as of September 30, 2017.

NOTE 65 – INVESTMENT IN ASPIRE CONSULTING GROUP, LLC

On January 5, 2016, the Company entered into a Share Exchange Agreement with Aspire Consulting Group, LLC, a VirginiaMaryland limited liability company (“Aspire”) and certain members of Aspire. Pursuant to the terms of the Exchange Agreement, the Company agreed to acquire 49% of all of the issued and outstanding membership units of Aspire in exchange for the issuance of 66,667 shares of the Company’s newly created Series B Convertible Preferred Stock to the Members valued at $460,002.

The Company has concluded that it has the ability to exercise significant influence, but not control, over an Aspire through its acquired 49% equity interest and therefore has accounted for the acquisition of the interest under the equity method.

The following table presents details of the Company’s investment is Aspire for the nine months ended Septemberas of June 30, 2018 and December 31, 2017:

TEXTMUNICATION HOLDINGS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2018

NOTE 76 – COMMITMENTS AND CONTINGENCIES

Office Lease

On January 6, 2015 the Company signed an amendment to its lease originally signed on May 9, 2008. The amended lease commenced January 1, 2015 and expires on thirty days’ notice. Rent expense was $5,268approximately $15,872 and $15,803 for the nine months ended September 30, 20172018 and 2016,2017, respectively.

Executive Employment Agreement

The Company has an employment agreement with the CEO/Chairman to perform duties and responsibilities as may be assigned by the Board of Directors. The base salary is $100,000in the amount of $120,000 per annum plus an annual discretionary bonus plus benefits commencing on December 17, 2013 and ending May 1, 20172019 with an automatic renewal on each anniversary date (May 1) thereafter.

Litigations, Claims and Assessments

The Company may become involved in various lawsuits and legal proceedings, which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise that may harm its business. The Company is currently not aware of any such legal proceedings or claims that they believe will have, individually or in the aggregate, a material adverse effect on its business, financial condition or operating results.

There was a dispute over a $36,363 note secured by 59,400,000 shares of the Company’s common stock. In the view of management, there are significant issues of fact regarding the proper issuance and assumption of this note by the Company. Additionally, there are issues over the validity of the prior debt. Regardless, the Company is in discussions to settle this note, and while no guarantee can be given as to the successful resolution of this matter, the Company believes it will be resolved without litigation. On July 7, 2016, the Company entered into an agreement to settle the note and accrued interest for 2,000,000 shares of common stock valued at $146,000.

TEXTMUNICATION HOLDINGS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE QUARTER ENDED SEPTEMBER 30, 2017

(UNAUDITED)

NOTE 87 – STOCKHOLDERS’ EQUITY

The Company is authorized to issue an aggregate of 4,000,000,000 shares of common stock with a par value of $0.0001. The Company is also authorized to issue 10,000,000 shares of “blank check” preferred stock with a par value of $0.0001.

On May 9, 2017, the Board of Directors voted to designate a class of preferred stock entitled Series C Convertible Preferred Stock, consisting of up to 2,000,000 shares, par value $0.0001. Under the Certificate of Designation, holders of Series C Convertible Preferred Stock will participate on an equal basis per-share with holders of common stock, Series A Preferred Stock and Series B Preferred Stock in any distribution upon winding up, dissolution, or liquidation. Holders of Series C Convertible Preferred Stock are entitled to vote together with the holders of our common stock on all matters submitted to shareholders at a rate of 875 votes for each share held. Holders of Series C Convertible Preferred Stock are entitled to convert each share held for 875 shares of common stock.

On February 16, 2017, the Company issued a total of 2,000,000,000 shares of our common stock to our officer and director, Wais Asefi, as compensation for services rendered. During the nine months ended June 30, 2017, the officer exchanged 1,750,000,000 of the common shares for 2,000,000 shares of newly designated Series C Preferred stock.

During the nine months ended September 30, 2017,2018, the Company issued 1,178,623,690892,882 shares of common stock (post-split) valued at $299,469 for the partial conversionsettlement of $348,258 convertible notes payable and $46,888 accrued interest. The converted portion of the notes also had associated derivative liabilities with fair values on the date of conversion of $1,085,344. The conversion of the derivative liabilities has been recorded through additional paid-in capital.debt related to a 3a10 settlement.

During the ninesix months ended SeptemberJune 30, 2017,2018, the Company issued 77,500,000647,459 shares of common stock (post-split) for services valued at $115,100.the settlement of $54,541 in notes payable.

On June 8, 2018 the Company entered into a subscription agreement for 9.98% of the company common shares outstanding for $100,000.

During the three months ended June 30, 2018, the Company’s Board of Directors approved a one to one thousand (1:1000) reverse stock split, which became effective July 9, 2018. The Company consolidated financial statements have been retroactively restated to the reflect the effect of the stock split

NOTE 98 – SUBSEQUENT’SUBSEQUENT EVENTS

Subsequent

On October 12, 2018, Textmunication Holdings, Inc. (“Company”), Wais Asefi, the Company’s CEO, and David Thielen, the Company’s COO, entered into a Settlement Agreement and Release (the “Agreement”) with Lester Einhaus (“Holder”) concerning a $25,000 convertible note issued by the Company to year end,the Holder on September 23, 2015 (the “Note”).

The Holder initiated litigation against the Company on April 27, 2017, in the Circuit Court of Cook County, Illinois, Case No. 2017 L 506, which was later removed to the United States District Court for the Northern District of Illinois, Case No. 17 C 4478 (the “Einhaus Lawsuit”). Messrs. Asefi and Thielen also brought claims against The Holder. The Agreement settled the Note and all claims, and the parties signed an order to dismiss the Einhaus Lawsuit.

The Agreement requires the Company to issue to the Holder 475,000 shares of the Company’s common stock, subject to the condition that the Holder does not own more than 4.99% of the Company’s outstanding shares at any time. As such, the shares will be issued out in tranches, with the first such tranche due within 10 days of signing the Agreement for 198,000 shares. The Holder agreed to a daily leak out of the greater of 10,000 shares or 15% of the trading volume.

On October 20, 2018, the Company issued 309,191,000 shares of common stock80,000 to a consultant for settlement of debt with a principal balance of $__________.professional services.

The company has evaluated subsequent events for recognition and disclosure through September 30, 2018 which is the date the financial statements were available to be issued. No other matters were identified affecting the accompanying financial statements and related disclosures.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements

Certain statements, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives, and expected operating results, and the assumptions upon which those statements are based, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements generally are identified by the words “believes,” “project,” “expects,” “anticipates,” “estimates,” “intends,” “strategy,” “plan,” “may,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. We intend such forward-looking statements to be covered by the safe-harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and are including this statement for purposes of complying with those safe-harbor provisions. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially from the forward-looking statements. Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse effect on our operations and future prospects on a consolidated basis include, but are not limited to: changes in economic conditions, legislative/regulatory changes, availability of capital, interest rates, competition, and generally accepted accounting principles. These risks and uncertainties should also be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise. Further information concerning our business, including additional factors that could materially affect our financial results, is included herein and in our other filings with the SEC.

Company Overview

We are a developing player in the mobile marketing and loyalty industry, providing cutting-edge mobile marketing solutions, rewards and loyalty to our clients. With a powerful yet intuitive suite of services, clients are able to reach more customers faster and reward them for repeat business. We help clients reach their marketing and revenue goals by educating clients with the most effective tools in mobile marketing, rewards, paperless redemption and loyalty.

In the past 4 years, we have grown to over 300765 clients and more than 800950 different locations in the United States Canada and Mexico.Canada. We have achieved this with an expanded focus on a variety of industries, including restaurants, retailers, entertainment venues and other partnership opportunities. We are looking to open new SMS markets in Europe and Asia based on new client relationships. We have decided to focus our energy on the gym, health and fitness club market. However, we are also working with Quick Service Restaurants (QSR), Beauty/Tanning salons, hospitality, entertainment, digital marketing and sporting events. Our new Smart Automated Messaging (SAM) platform is fully operational and has completely replaced our legacy software platform. The SAM platform has the capacity to bring on several thousand new clients while adding new functionality such as Rich Communication Services (RCS) and Artificial Intelligence (AI). We will be introducing both technologies to SAM in early 2019.

More recently,Our new software platform provides a powerful nonintrusive and valued-added engagement tool capable of delivering more than one billion SMS per month. CIOReview Magazine recognized Textmunication as one of the “Top 20 Most Promising Digital Marketing Solution Providers” in its annual 2018 edition. We offer cutting-edge technology with upcoming solutions such as Rich Communication Services (RCS). We were chosen as an early adopter of RCS by a​leading mobile messaging provider, OpenMarket, which could create a paradigm shift in the text messaging world with rich images, videos, chat box features and multi-media in a single text.

We have built an advanced “Communication Platform as a Service” (CPaaS) backbone enabling developers to add real-time communication features in their own applications without needing to build backend infrastructure and interfaces. We are working to develop “Messaging as a Platform” (MaaP). A MaaP platform combines advanced messaging with standardized interfaces to plugins creating a richer experience for consumers, such as RCS. Textmunication is targeting its RCS solution for early 2019. Textmunication expanded its White Label program allowing companies of all sizes to implement an “out-of-the-box” solution “Powered by Textmunication”. In addition to White Label, the company offers standalone Application Programming Interfaces or APIs, integrated API solutions and non-integrated services.

API development is a major focus for the remainder of 2018 and into 2019. We can produce a new API in 2-3 weeks for each new client. We now have 7 of the top 8 Health Club Management Software (CMS) companies using our integrated SMS fitness solution. There is no other automated health and fitness solution offering a completed end-to-end solution similar to ours. We now have access to more than 25,000 health clubs in North America and will focus on converting new clubs to our solution in the next 12 months.

By adding RCS and AI, we can add customer value and higher priced solutions to any vertical we are pursuing. The evolution of SMS into RCS will establish Textmunication as an innovator of new technology and upgraded services. We are pursuing AI assets to add to SAM which will establish us as a pure technology company with an advanced communication platform. We feel the transformation into a technology company with AI will open new revenue streams and add value to our technology assets.

We have also entered into the IT consulting business through our acquisition of a minority interest in Aspire Consulting, LLC. We plan to assist our controlling partner in the development of this consulting business in addition to improving the market position of our mobile marketing business.

Our principal executive office is located at 1940 Contra Costa Blvd. Pleasant Hill, CA 94523 and our telephone number is (925-777-2111).

Results of Operation for Three and Nine Months Ended September 30, 20172018 and 20162017

Revenues

For the three months ended September 30, 2017,2018, we earned revenues in the amount of $184,835,$218,251, as compared with revenues of $129,943$184,835 for the three months ended September 30, 2016.2017. For the nine months ended September 30, 2017,2018, we earned revenues in the amount of $721,383,$709,375, as compared with revenues of $321,802$721,383 for the nine months ended September 30, 2016.2017.

The increasesslight decrease in revenues for the three and nine months ended September 30, 20172018 over the prior year periods areperiod is due to more customer accounts achieved fromfocusing on launching a changenew platform that we are hopeful will increase revenues in our pricing modelfuture quarters. We expect to become more competitive.

achieve greater revenues for the rest of 2018 over 2017.

Cost of Revenues

Cost of revenues was $87,028$117,241 for the three months ended September 30, 2017,2018, as compared with $13,560$87,028 for the same period ended September 30, 2016.2017. Cost of revenues was $244,494$232,145 for the nine months ended September 30, 2017,2018, as compared with $64,079$244,494 for the same period ended September 30, 2016.

Gross Profit2017.

Our gross profit was $97,807$101,010 for the three months ended September 30, 2018 or approximately 46% of revenues, as compared with $97,807 for the same period ended September 30, 2017, or approximately 53% of revenues, as compared with $116,383 for the same period ended September 30, 2016, or approximately 90% of revenues. Our gross profit was $476,889$477,230 for the nine months ended September 30, 2018 or approximately 67% of revenues, as compared with $476,889 for the same period ended September 30, 2017, or approximately 66% of revenues, as compared with $257,723 for the same period ended September 30, 2016, or approximately 80% of revenues.

We spent more on Short Message Service (“SMS”)Our cost and expense and subcontractingof revenues increased for developers to build and maintain programming code and that is the main reason for the decrease in margin in the nine months ended September 30, 20172018 compared with the same period ended 2016.2017 and our margins were less as a result of additional development resources. We expect that our gross profit margin will stabilize and then decrease  as we sign up more clientsa similar cost of revenues for service.the rest of 2018.

Operating ExpenseExpenses

Our operating expenseexpenses were $302,329 for the three months ended September 30, 2018, as compared with $533,658 for the three months ended September 30, 2017, as compared with $619,6982017. Our operating expenses were $815,52 for the threenine months ended September 30, 2016. Our operating expense were2018, as compared with $7,007,006 for the nine months ended September 30, 2017, as compared with $997,476 for the nine months ended September 30, 2016.2017.

Our

The main reason for our decreased operating expenses for the nine months ended September 30,in 2018 was a result of less spent on officer compensation and general and administrative expenses. In 2017, mainly consistedwe expensed $6,000,000 as a result of a share issuancestock-based compensation to our officer and director of 2 billion shares valued at $6,000,000.CEO, Wais Asefi. We expect that our operating expenses for the rest of 20172018 will decrease,remain similar to that in the present quarter, provided that we do not have to issue stock for services, which was the main reason for our increased expenses for the nine months.services. Given our lack of operating capital, we have been forced to issue shares for services rendered to the company. We hope that increased revenues will lessen that trend for 20172018 and beyond.

Other Income/ExpenseExpenses

We had other expenseincome of $27,947 for the three months ended September 30, 2018 compared with other expenses of $180,772 for the same period ended September 30, 2017. We had other income of $324,952 for the nine months ended September 30, 2018 compared with other expenses of $851,776 for the same period ended September 30, 2017.

Other income for the three months ended September 30, 2018 consisted mainly of a $19,261 change in fair value of derivative liabilities based on the Black-Scholes option pricing model. Other expenses for the three months ended September 30, 2017 compared with otherconsisted mainly of interest expense of $534,174 for the same period ended September 30, 2016. We had other expense$97,020, amortization of $851,776debt discount of $47,794 and a gain on derivative liability of $37,684.

Other income for the nine months ended September 30, 2017 compared with other expense2018 consisted mainly of $1,845,359 fora $255,339 gain on the same period ended September 30, 2016.

settlement of notes payable and a $119,369 change in the fair value of derivative liabilities based on the Black-Scholes option pricing model, offset mainly by the amortization of debt discount of $42,534. Other expenseexpenses for the nine months ended September 30, 2017 consisted mainly of a $651,147 change in the fair value of derivative liabilities based on the Black-Scholes option pricing model, along with a $159,208 amortization of debt discount. Other expense for the same period ended 2016 consisted mainly of a $1,046,435 change in the fair value of derivative liabilities based on the Black-Scholes model, along with $423,313 amortization of debt discount.

Net Income/Loss

We had a net loss of $174,488 for the three months ended September 30, 2018, as compared with a net loss of $617,115 for the three months ended September 30, 2017,2017. We had a net loss of $15,583 for the nine months ended September 30, 2018, as compared with a net loss of $1,037,560$7,384,111 for the three months ended September 30, 2016. We had a net loss of $7,384,111 for the nine months ended September 30, 2017, as compared with net loss of $2,572,904 for the nine months ended September 30, 2016.2017.

Liquidity and Capital Resources

As of September 30, 2017,2018, we had total current assets of $33,806,$43,717, consisting of cash, receivables and receivables.prepaid expenses. Our total current liabilities as of September 30, 20172018 were $1,491,317.$385,564. We had a working capital deficit of $1,457,511$341,847 as of September 30, 2017.2018, compared with a working capital deficit of $253,566 as of June 30, 2018.

Cash Flows from Operating Activities

Operating activities used $50,734$21,751 in cash for the nine months ended September 30, 2017,2018, compared with cash used of $347,484$50,734 for the nine months ended September 30, 2016.2017. Our negative operating cash flow for the nine months ended September 30, 2018 was largely the result of a gain on settlement of debt of $261,256, offset mainly by gain on derivative liability of $196,168. Our negative operating cash flow for the nine months ended September 30, 2017 was largely the result of our net loss for the period of $7,384,111, offset by share-based compensation of $6,115,100 and loss on derivative liabilities of $651,147.

Cash Flows from Investing Activities

Investing activities used $43,068$39,863 in cash for the nine months ended September 30, 2017,2018, compared with cash providedused of $24,335$43,068 for the nine months ended September 30, 2016.2017. Cash flows used in investing activities for the nine months ended September 30, 2018 resulted from the capitalized cost for internal use software. Cash flows used in investing activities for the nine months ended September 30, 2017 resulted from the purchase of fixed assets.

Aspire has secured three large indefinite delivery/indefinite quantity (“IDIQ”) contracts in 2017 and has three more pending in Q4. We believe that Aspire offers long-term revenue opportunities in the government contracting sector. Aspire is working with key contractors for both federal and state IT Services contracts. These contracts are with some of the nation’s mission critical programs such as Centers for Medicare and Medicaid Services (“CMS”), Social Security Administration (“SSA”) and U.S. Department of Veterans Affairs (“VA”) VECTOR as a strategic subcontractor. Aspire will work with the Prime contractors as task orders are released under each IDIQ.

Cash Flows from Financing Activities

Cash flows provided by financing activities during the nine months ended September 30, 20172018 amounted to $109,118,$62,500, compared with cash flows provided by financing activities of $337,980$109,118 for the nine months ended September 30, 2016.2017. Our positive cash flows for the nine months ended September 30, 2018 consisted of proceeds from the issuance of equity securities, offset by payments on convertible notes payable. Our positive cash flows for the nine months ended September 30, 2017 consisted of proceeds from convertible notes and loans payable, offset by payments on loans payable.

The features of the debt instruments and payables concerning our financing activities are detailed in the footnotes to our financial statements.

Our optimum level of growth for success will be achieved if we are able to raise $250,000 in the next twelve months. However, funds are difficult to raise in today’s economic environment. If we are unable to raise $250,000 our ability to implement our business plan and achieve our goals will be significantly diminished.

We have experienced a history of losses. With our revenues increasing, however, we are less reliant on outside capital as we have been in the past. We will need at a minimum $120,000 in capital to operate in the next 12 months.

We are dependent on investment capital to continue our survival. We have raisedlimiting raising money through convertible debt, since they are almost always on unfavorable terms. There is no guarantee that these small convertible loans will be available to us in the future or on terms acceptable to us.

We do not have any formal commitments or arrangements for the sales of stock or the advancement or loan of funds at this time. There can be no assurance that such additional financing will be available to us on acceptable terms, or at all.

Going Concern

As of September 30, 2017,2018, we have an accumulated deficit of $14,823,257.$15,165,823. Our ability to continue as a going concern is contingent upon the successful completion of additional financing arrangements and our ability to achieve and maintain profitable operations. While we are expanding our best efforts to achieve the above plans, there is no assurance that any such activity will generate funds that will be available for operations. These conditions raise substantial doubt about our ability to continue as a going concern. These financial statements do not include any adjustments that might arise from this uncertainty.

Off Balance Sheet Arrangements

As of September 30, 2017,2018, there were no off balanceoff-balance sheet arrangements.

Critical Accounting Policies

In December 2001, the SEC requested that all registrants list their most “critical accounting polices” in the Management Discussion and Analysis. The SEC indicated that a “critical accounting policy” is one which is both important to the portrayal of a company’s financial condition and results, and requires management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. Our critical accounting policies are disclosed in Note 2 of our audited financial statements included in the Form 10-K filed with the Securities and Exchange Commission.

Recent Accounting Pronouncements

No new accounting pronouncements issued or effective during the fiscal year has had or is expected to have a material impact on the financial statements.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

A smaller reporting company is not required to provide the information required by this Item.

Item 4. Controls and Procedures

Disclosure Controls and Procedures

We conducted an evaluation, with the participation of our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act, as of September 30, 2017,2018, to ensure that information required to be disclosed by us in the reports filed or submitted by us under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities Exchange Commission’s rules and forms, including to ensure that information required to be disclosed by us in the reports filed or submitted by us under the Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that as of September 30, 2017,2018, our disclosure controls and procedures were not effective at the reasonable assurance level due to the material weaknesses identified and described below.

Our principal executive officers do not expect that our disclosure controls or internal controls will prevent all error and all fraud. Although our disclosure controls and procedures were designed to provide reasonable assurance of achieving their objectives and our principal executive officers have determined that our disclosure controls and procedures are effective at doing so, a control system, no matter how well conceived and operated, can provide only reasonable, not absolute assurance that the objectives of the system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented if there exists in an individual a desire to do so. There can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

Remediation Plan to Address the Material Weaknesses in Internal Control over Financial Reporting

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. Management identified the following three material weaknesses that have caused management to conclude that, as of September 30, 2017,2018, our disclosure controls and procedures, and our internal control over financial reporting, were not effective at the reasonable assurance level:

To address these material weaknesses, management performed additional analyses and other procedures to ensure that the financial statements included herein fairly present, in all material respects, our financial position, results of operations and cash flows for the periods presented. Accordingly, we believe that the financial statements included in this report fairly present, in all material respects, our financial condition, results of operations and cash flows for the periods presented.

To remediate the material weakness in our documentation, evaluation and testing of internal controls we plan to engage a third-party firm to assist us in remedying this material weakness once resources become available.

We intend to remedy our material weakness with regard to insufficient segregation of duties by hiring additional employees in order to segregate duties in a manner that establishes effective internal controls once resources become available.

Changes in Internal Control over Financial Reporting

No change in our system of internal control over financial reporting occurred during the period covered by this report, the period ended September 30, 2017,2018, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

Item 1. Legal Proceedings

Below is a list of our legal proceedings and the settlements we recently entered into.

JSJ Investments, Inc. vs.On October 12, 2018, Textmunication Holdings, Inc.

95th District Court of Dallas County, Texas

Filed on 2/7/2017

Case DC-17-01404

Auctus Fund vs. Textmunication Holdings, Inc.

United States District Court – District of Massachusetts

Filed on 3/24/2017

Case 1:17-cv-10504

Textmunication Holdings, Inc. vs. Carebourn Capital. L.P.

United States District Court – District of Nevada

Filed on 4/5/2017

Case 2:17-cv-00968-JAD-VCF

Textmunication Holdings, Inc. vs. Lester Einhaus

Eighth Judicial District Court of Clark County, Nevada

Filed on 4/10/2017

A-17-753743-C

On May 24, 2017, our company (“Company”), Wais Asefi, the Company’s CEO, and JSJ Investments Inc. (“JSJ”) entered into a Final Settlement Agreement. Pursuant toDavid Thielen, the Settlement Agreement, the parties agreed as follows:

Effective July 3, 2017, our company and Auctus Fund, LLC (“Auctus”)Company’s COO, entered into a Settlement Agreement and Mutual General Release. PursuantRelease (the “Agreement”) with Lester Einhaus (“Holder”) concerning a $25,000 convertible note issued by the Company to the SettlementHolder on September 23, 2015 (the “Note”).

The Holder initiated litigation against the Company on April 27, 2017, in the Circuit Court of Cook County, Illinois, Case No. 2017 L 506, which was later removed to the United States District Court for the Northern District of Illinois, Case No. 17 C 4478 (the “Einhaus Lawsuit”). Messrs. Asefi and Thielen also brought claims against The Holder. The Agreement settled the Note and all claims, and the parties agreed as follows:signed an order to dismiss the Einhaus Lawsuit.

Effective August 4, 2017, our company and Carebourn Capital, L.P. (“Carebourn”) entered into a Debt Settlement Agreement. Pursuant to the SettlementHolder 475,000 shares of the Company’s common stock, subject to the condition that the Holder does not own more than 4.99% of the Company’s outstanding shares at any time. As such, the shares will be issued out in tranches, with the first such tranche due within 10 days of signing the Agreement for 198,000 shares. The Holder agreed to a daily leak out of the parties agreed as follows:greater of 10,000 shares or 15% of the trading volume.

Item 1A: Risk Factors

For our mobile marketing business, see risk factors included in our Annual Report on Form 10-K for the year ended December 31, 2014 filed on April 15, 2015.

For our interest in Aspire Consulting Group, LLC, see risk factors included in our Current Report on Form 8-K filed on January 1, 2016.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

The information set forth below relates to our issuances of securities without registration under the Securities Act of 1933.

During the nine months ended September 30, 2017,2018, we issued 1,178,623,690892,882 shares of common stock (post-split) valued at $299,469 for the partial conversionsettlement of $348,258 convertible notes payable and $46,888 accrued interest.debt related to a 3a10 settlement.

During the nine months ended September 30, 2017, the Company2018, we issued 77,500,000647,459 shares of common stock (post-split) for services valued at $115,100.the settlement of $54,541 in notes payable.

On June 8, 2018 we entered into a subscription agreement for 9.98% of the company common shares outstanding for $100,000.

These securities were issued pursuant to Section 4(2) of the Securities Act and/or Rule 506 promulgated thereunder. The holders represented their intention to acquire the securities for investment only and not with a view towards distribution. The investors were given adequate information about us to make an informed investment decision. We did not engage in any general solicitation or advertising. We directed our transfer agent to issue the stock certificates with the appropriate restrictive legend affixed to the restricted stock.

Item 3. Defaults upon Senior Securities

None

Item 4. Mine Safety Disclosures

N/A

Item 5. Other Information

None

Item 6. Exhibits

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.